Aug. 30 (Bloomberg) -- Ipsen SA Chief Executive Officer
Marc de Garidel said it’s becoming more complicated to do
business in China as doctors change habits amid a widening local
probe of the pharmaceutical industry.

Drugmakers under investigation have stopped promoting
products in China, and physicians in some hospitals no longer
want to meet sales representatives, de Garidel said during a
conference call with reporters today after the French company
published first-half earnings.

“In certain cities, in certain areas, there is a
toughening of the marketing conditions,” he said. “We are
monitoring this very closely. We don’t know how long it will
last.”

The comments are the first sign that China’s investigation
of bribery allegations against GlaxoSmithKline Plc is hurting
business for drug companies. A government crackdown against
corruption in the $350 billion Chinese health-care market has
extended to other foreign companies and local hospitals since
the country announced the probe, which involves charges that
Glaxo employees used cash and sexual favors to bribe doctors and
health officials to promote sales.

Ipsen, the maker of a rival product to Allergan Inc.’s
Botox wrinkle smoother, isn’t being investigated in China and
hasn’t been visited by local authorities, de Garidel said.

Beijing Headquarters

The French company, based in Boulogne-Billancourt, just
outside of Paris, has about 700 employees in China, with local
headquarters in Beijing and a plant in Tianjin, in the northern
part of the country. The drugmaker has been present in China for
almost 21 years, Didier Veron, a spokesman for Ipsen, said in e-mailed comments today.

Ipsen’s Chinese sales were affected in July and August,
because of changing behavior among doctors, de Garidel said. The
executive said it’s difficult to make predictions on how the
situation will evolve.

China said last month it would punish 39 hospital employees
for taking illegal kickbacks from drugmakers. The hospital staff
received inducements totaling 2.82 million yuan ($460,000) from
two pharmaceutical companies between January 2010 and December
2012, China’s official Xinhua news agency reported July 23,
citing the National Health and Family Planning Commission.

Falsely Inflated

Regulators will “severely crack down” on bribery, fake
medication and forged documents, China’s Food and Drug
Administration said last month. Bribery was one of the main
reasons drug prices were falsely inflated in China, Gao Feng,
head of the economic crimes investigations unit of the Public
Security Ministry, said at a briefing on July 15.

Glaxo faces allegations it traded in sexual favors and had
spurious travel and meeting expenses amounting to 3 billion
yuan. Eli Lilly & Co., the Indianapolis-based drugmaker, said
last week it was investigating allegations its employees paid
Chinese doctors at least 30 million yuan in bribes and
kickbacks. Paris-based Sanofi faces an investigation over
similar allegations.

Simon Steel, a spokesman for Glaxo, said in an e-mail that
he had no immediate comment to make on whether the U.K.
drugmaker has stopped marketing its products in China because of
the investigation. Laurence Bollack, a spokeswoman for Sanofi in
Paris, said she had no immediate comment when contacted by
telephone.

Glaxo said last month it will cooperate with authorities
and that it is reviewing all third-party agency relationships
and transactions with travel agencies. Sanofi, France’s largest
drugmaker, said Aug. 10 it will cooperate with any review of its
business in China.